[Federal Register: October 25, 2007 (Volume 72, Number 206)]
[Notices]
[Page 60703-60709]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr25oc07-113]
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SOCIAL SECURITY ADMINISTRATION
[Docket No. SSA-2007-0081]
Office of the Commissioner; Cost-of-Living Increase and Other
Determinations for 2008
AGENCY: Social Security Administration.
ACTION: Notice.
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SUMMARY: The Commissioner has determined--
(1) A 2.3 percent cost-of-living increase in Social Security
benefits under title II of the Social Security Act (the Act), effective
for December 2007;
(2) An increase in the Federal Supplemental Security Income (SSI)
monthly benefit amounts under title XVI of the Act for 2008 to $637 for
an eligible individual, $956 for an eligible individual with an
eligible spouse, and $319 for an essential person;
(3) The student earned income exclusion to be $1,550 per month in
2008 but not more than $6,240 in all of 2008;
(4) The dollar fee limit for services performed as a representative
payee to be $35 per month ($68 per month in the case of a beneficiary
who is disabled and has an alcoholism or drug addiction condition that
leaves him or her incapable of managing benefits) in 2008;
(5) The dollar limit on the administrative-cost assessment charged
to attorneys representing claimants to be $79 in 2008;
(6) The national average wage index for 2006 to be $38,651.41;
(7) The Old-Age, Survivors, and Disability Insurance (OASDI)
contribution and benefit base to be $102,000 for remuneration paid in
2008 and self-employment income earned in taxable years beginning in
2008;
(8) The monthly exempt amounts under the Social Security retirement
earnings test for taxable years ending in calendar year 2008 to be
$1,130 and $3,010;
(9) The dollar amounts (``bend points'') used in the primary
insurance amount benefit formula for workers who become eligible for
benefits, or who die before becoming eligible, in 2008 to be $711 and
$4,288;
(10) The dollar amounts (``bend points'') used in the formula for
computing maximum family benefits for workers who become eligible for
benefits, or who die before becoming eligible, in 2008 to be $909,
$1,312, and $1,711;
(11) The amount of taxable earnings a person must have to be
credited with a quarter of coverage in 2008 to be $1,050;
(12) The ``old-law'' contribution and benefit base to be $75,900
for 2008;
(13) The monthly amount deemed to constitute substantial gainful
activity for statutorily blind individuals in 2008 to be $1,570, and
the corresponding amount for non-blind disabled persons to be $940;
(14) The earnings threshold establishing a month as a part of a
trial work period to be $670 for 2008; and
(15) Coverage thresholds for 2008 to be $1,600 for domestic workers
and $1,400 for election workers.
FOR FURTHER INFORMATION CONTACT: Jeffrey L. Kunkel, Office of the Chief
Actuary, Social Security Administration, 6401 Security Boulevard,
Baltimore, MD 21235, (410) 965-3013. Information relating to this
announcement is available on our Internet site at http://www.socialsecurity.gov/OACT/COLA/index.html.
For information on
eligibility or claiming benefits, call 1-800-772-1213, or visit our
Internet site, Social Security Online, at http://www.socialsecurity.gov
.
SUPPLEMENTARY INFORMATION: In accordance with the Act, the Commissioner
must publish within 45 days after the close of the third calendar
quarter of 2007 the benefit increase percentage and the revised table
of ``special minimum'' benefits (section 215(i)(2)(D)). Also, the
Commissioner must publish on or before November 1 the national average
wage index for 2006 (section 215(a)(1)(D)), the OASDI fund ratio for
2007 (section 215(i)(2)(C)(ii)), the OASDI contribution and benefit
base for 2008 (section 230(a)), the amount of earnings required to be
credited with a quarter of coverage in 2008 (section 213(d)(2)), the
monthly exempt amounts under the Social Security retirement earnings
test for 2008 (section 203(f)(8)(A)), the formula for computing a
primary insurance amount for workers who first become eligible for
benefits or die in 2008 (section 215(a)(1)(D)), and the formula
[[Page 60704]]
for computing the maximum amount of benefits payable to the family of a
worker who first becomes eligible for old-age benefits or dies in 2008
(section 203(a)(2)(C)).
Cost-of-Living Increases
General
The next cost-of-living increase, or automatic benefit increase, is
2.3 percent for benefits under titles II and XVI of the Act. Under
title II, OASDI benefits will increase by 2.3 percent for individuals
eligible for December 2007 benefits, payable in January 2008. This
increase is based on the authority contained in section 215(i) of the
Act (42 U.S.C. 415(i)).
Under title XVI, Federal SSI payment levels will also increase by
2.3 percent effective for payments made for the month of January 2008
but paid on December 31, 2007. This is based on the authority contained
in section 1617 of the Act (42 U.S.C. 1382f).
Automatic Benefit Increase Computation
Under section 215(i) of the Act, the third calendar quarter of 2007
is a cost-of-living computation quarter for all the purposes of the
Act. The Commissioner is, therefore, required to increase benefits,
effective for December 2007, for individuals entitled under section 227
or 228 of the Act, to increase primary insurance amounts of all other
individuals entitled under title II of the Act, and to increase maximum
benefits payable to a family. For December 2007, the benefit increase
is the percentage increase in the Consumer Price Index for Urban Wage
Earners and Clerical Workers from the third quarter of 2006 to the
third quarter of 2007.
Section 215(i)(1) of the Act provides that the Consumer Price Index
(CPI) for a cost-of-living computation quarter shall be the arithmetic
mean of this index for the 3 months in that quarter. In accordance with
20 CFR 404.275, we round the arithmetic mean, if necessary, to the
nearest 0.001.
The Department of Labor publishes CPIs to 3 decimal places. It
published CPIs to 1 decimal place for months prior to January 2007. The
CPI for Urban Wage Earners and Clerical Workers for each month in the
quarter ending September 30, 2006, is: For July 2006, 199.2; for August
2006, 199.6; and for September 2006, 198.4. The arithmetic mean for
this calendar quarter is 199.067. The corresponding CPI for each month
in the quarter ending September 30, 2007, is: for July 2007, 203.700;
for August 2007, 203.199; and for September 2007, 203.889. The
arithmetic mean for this calendar quarter is 203.596. Thus, because the
CPI for the calendar quarter ending September 30, 2007, exceeds that
for the calendar quarter ending September 30, 2006 by 2.3 percent
(rounded to the nearest 0.1), a cost-of-living benefit increase of 2.3
percent is effective for benefits under title II of the Act beginning
December 2007.
Section 215(i) also specifies that an automatic benefit increase
under title II, effective for December of any year, will be limited to
the increase in the national average wage index for the prior year if
the ``OASDI fund ratio'' for that year is below 20.0 percent. The OASDI
fund ratio for a year is the ratio of the combined assets of the Old-
Age and Survivors Insurance and Disability Insurance Trust Funds at the
beginning of that year to the combined expenditures of these funds
during that year. (The expenditures in the ratio's denominator exclude
transfer payments between the two trust funds, and reduce any transfers
to the Railroad Retirement Account by any transfers from that account
into either trust fund.) For 2007, the OASDI fund ratio is assets of
$2,048,112 million divided by estimated expenditures of $593,483
million, or 345.1 percent. Because the 345.1-percent OASDI fund ratio
exceeds 20.0 percent, the automatic benefit increase for December 2007
is not limited.
Title II Benefit Amounts
In accordance with section 215(i) of the Act, in the case of
workers and family members for whom eligibility for benefits (i.e., the
worker's attainment of age 62, or disability or death before age 62)
occurred before 2008, benefits will increase by 2.3 percent beginning
with benefits for December 2007 which are payable in January 2008. In
the case of first eligibility after 2007, the 2.3 percent increase will
not apply.
For eligibility after 1978, benefits are generally determined using
a benefit formula provided by the Social Security Amendments of 1977
(Pub. L. 95-216), as described later in this notice.
For eligibility before 1979, we determine benefits by means of a
benefit table. The table is available on the Internet at http://www.socialsecurity.gov/OACT/ProgData/tableForm.html
, or by writing to:
Social Security Administration, Office of Public Inquiries, Windsor
Park Building, 6401 Security Boulevard, Baltimore, MD 21235.
Section 215(i)(2)(D) of the Act requires that, when the
Commissioner determines an automatic increase in Social Security
benefits, the Commissioner will publish in the Federal Register a
revision of the range of the primary insurance amounts and
corresponding maximum family benefits based on the dollar amount and
other provisions described in section 215(a)(1)(C)(i). We refer to
these benefits as ``special minimum'' benefits. These benefits are
payable to certain individuals with long periods of relatively low
earnings. To qualify for such benefits, an individual must have at
least 11 ``years of coverage.'' To earn a year of coverage for purposes
of the special minimum benefit, a person must earn at least a certain
proportion of the ``old-law'' contribution and benefit base (described
later in this notice). For years before 1991, the proportion is 25
percent; for years after 1990, it is 15 percent. In accordance with
section 215(a)(1)(C)(i), the table below shows the revised range of
primary insurance amounts and corresponding maximum family benefit
amounts after the 2.3 percent automatic benefit increase.
Special Minimum Primary Insurance Amounts and Maximum Family Benefits
Payable for December 2007
------------------------------------------------------------------------
Primary Maximum
Number of years of coverage insurance family
amount benefit
------------------------------------------------------------------------
11............................................ $34.90 $53.10
12............................................ 71.00 107.50
13............................................ 107.40 161.70
14............................................ 143.30 215.60
15............................................ 179.10 269.60
16............................................ 215.40 324.10
17............................................ 251.60 378.60
18............................................ 287.70 432.60
19............................................ 323.70 486.80
20............................................ 359.90 540.70
21............................................ 396.20 595.30
22............................................ 432.00 649.40
23............................................ 468.70 704.30
24............................................ 504.70 758.10
25............................................ 540.70 811.70
26............................................ 577.40 866.90
27............................................ 613.00 920.90
28............................................ 649.20 974.90
29............................................ 685.30 1,029.40
30............................................ 721.40 1,083.00
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Title XVI Benefit Amounts
In accordance with section 1617 of the Act, maximum SSI Federal
benefit amounts for the aged, blind, and disabled will increase by 2.3
percent effective January 2008. For 2007, we derived the monthly
benefit amounts for an eligible individual, an eligible individual with
an eligible spouse, and for an essential person--$623, $934, and $312,
respectively--from corresponding yearly unrounded Federal SSI benefit
amounts of $7,479.50, $11,217.99, and $3,748.32. For 2008, these yearly
[[Page 60705]]
unrounded amounts increase by 2.3 percent to $7,651.53, $11,476.00, and
$3,834.53, respectively. Each of these resulting amounts must be
rounded, when not a multiple of $12, to the next lower multiple of $12.
Accordingly, the corresponding annual amounts, effective for 2008, are
$7,644, $11,472, and $3,828. Dividing the yearly amounts by 12 gives
the corresponding monthly amounts for 2008--$637, $956, and $319,
respectively. In the case of an eligible individual with an eligible
spouse, we equally divide the amount payable between the two spouses.
Title VIII of the Act provides for special benefits to certain
World War II veterans residing outside the United States. Section 805
provides that ``[t]he benefit under this title payable to a qualified
individual for any month shall be in an amount equal to 75 percent of
the Federal benefit rate [the maximum amount for an eligible
individual] under title XVI for the month, reduced by the amount of the
qualified individual's benefit income for the month.'' Thus the monthly
benefit for 2008 under this provision is 75 percent of $637, or
$477.75.
Student Earned Income Exclusion
A blind or disabled child, who is a student regularly attending
school, college, or university, or a course of vocational or technical
training, can have limited earnings that are not counted against his or
her SSI benefits. The maximum amount of such income that may be
excluded in 2007 is $1,510 per month but not more than $6,100 in all of
2007. These amounts increase based on a formula set forth in regulation
20 CFR 416.1112.
To compute each of the monthly and yearly maximum amounts for 2008,
we increase the corresponding unrounded amount for 2007 by the latest
cost-of-living increase. If the amount so calculated is not a multiple
of $10, we round it to the nearest multiple of $10. The unrounded
monthly amount for 2007 is $1,513.29. We increase this amount by 2.3
percent to $1,548.10, which we then round to $1,550. Similarly, we
increase the unrounded yearly amount for 2007, $6,100.08, by 2.3
percent to $6,240.38 and round this to $6,240. Thus the maximum amount
of the income exclusion applicable to a student in 2008 is $1,550 per
month but not more than $6,240 in all of 2008.
Fee for Services Performed as a Representative Payee
Sections 205(j)(4)(A)(i) and 1631(a)(2)(D)(i) of the Act permit a
qualified organization to collect from an individual a monthly fee for
expenses incurred in providing services performed as such individual's
representative payee. Currently the fee is limited to the lesser of:
(1) 10 percent of the monthly benefit involved; or (2) $34 per month
($66 per month in any case in which the individual is entitled to
disability benefits and the Commissioner has determined that payment to
the representative payee would serve the interest of the individual
because the individual has an alcoholism or drug addiction condition
and is incapable of managing such benefits). The dollar fee limits are
subject to increase by the automatic cost-of-living increase, with the
resulting amounts rounded to the nearest whole dollar amount. Thus we
increase the current amounts by 2.3 percent to $35 and $68 for 2008.
Attorney Assessment Fee
Under sections 206(d) and 1631(d) of the Act, whenever a fee for
services is required to be paid to an attorney who has represented a
claimant, the Commissioner must impose on the attorney an assessment to
cover administrative costs. Such assessment shall be no more than 6.3
percent of the attorney's fee or, if lower, a dollar amount that is
subject to increase by the automatic cost-of-living increase. We derive
the dollar limit for December 2007 by increasing the unrounded limit
for December 2006, $77.47, by 2.3 percent, which gives $79.25. We then
round $79.25 to the next lower multiple of $1. The dollar limit
effective for December 2007 is thus $79.
National Average Wage Index for 2006
General
Under various provisions of the Act, several amounts increase
automatically with annual increases in the national average wage index.
The amounts are: (1) The OASDI contribution and benefit base; (2) the
exempt amounts under the retirement earnings test; (3) the dollar
amounts, or ``bend points,'' in the primary insurance amount and
maximum family benefit formulas; (4) the amount of earnings required
for a worker to be credited with a quarter of coverage; (5) the ``old-
law'' contribution and benefit base (as determined under section 230 of
the Act as in effect before the 1977 amendments); (6) the substantial
gainful activity amount applicable to statutorily blind individuals;
and (7) the coverage threshold for election officials and election
workers. Also, section 3121(x) of the Internal Revenue Code requires
that the domestic employee coverage threshold be based on changes in
the national average wage index.
In addition to the amounts required by statute, two amounts
increase automatically under regulatory requirements. The amounts are
(1) the substantial gainful activity amount applicable to non-blind
disabled persons, and (2) the monthly earnings threshold that
establishes a month as part of a trial work period for disabled
beneficiaries.
Computation
The determination of the national average wage index for calendar
year 2006 is based on the 2005 national average wage index of
$36,952.94 announced in the Federal Register on October 26, 2006 (71 FR
62636), along with the percentage increase in average wages from 2005
to 2006 measured by annual wage data tabulated by the Social Security
Administration (SSA). The wage data tabulated by SSA include
contributions to deferred compensation plans, as required by section
209(k) of the Act. The average amounts of wages calculated directly
from these data were $35,448.93 and $37,078.27 for 2005 and 2006,
respectively. To determine the national average wage index for 2006 at
a level that is consistent with the national average wage indexing
series for 1951 through 1977 (published December 29, 1978, at 43 FR
61016), we multiply the 2005 national average wage index of $36,952.94
by the percentage increase in average wages from 2005 to 2006 (based on
SSA-tabulated wage data) as follows, with the result rounded to the
nearest cent.
Amount
Multiplying the national average wage index for 2005 ($36,952.94)
by the ratio of the average wage for 2006 ($37,078.27) to that for 2005
($35,448.93) produces the 2006 index, $38,651.41. The national average
wage index for calendar year 2006 is about 4.60 percent greater than
the 2005 index.
OASDI Contribution and Benefit Base
General
The OASDI contribution and benefit base is $102,000 for
remuneration paid in 2008 and self-employment income earned in taxable
years beginning in 2008.
The OASDI contribution and benefit base serves two purposes:
(a) It is the maximum annual amount of earnings on which OASDI
taxes are paid. The OASDI tax rate for remuneration paid in 2008 is 6.2
percent for employees and employers,
[[Page 60706]]
each. The OASDI tax rate for self-employment income earned in taxable
years beginning in 2008 is 12.4 percent. (The Hospital Insurance tax is
due on remuneration, without limitation, paid in 2008, at the rate of
1.45 percent for employees and employers, each, and on self-employment
income earned in taxable years beginning in 2008, at the rate of 2.9
percent.)
(b) It is the maximum annual amount of earnings used in determining
a person's OASDI benefits.
Computation
Section 230(b) of the Act provides the formula used to determine
the OASDI contribution and benefit base. Under the formula, the base
for 2008 shall be the larger of: (1) The 1994 base of $60,600
multiplied by the ratio of the national average wage index for 2006 to
that for 1992; or (2) the current base ($97,500). If the resulting
amount is not a multiple of $300, it shall be rounded to the nearest
multiple of $300.
Amount
Multiplying the 1994 OASDI contribution and benefit base amount
($60,600) by the ratio of the national average wage index for 2006
($38,651.41 as determined above) to that for 1992 ($22,935.42) produces
the amount of $102,124.81. We round this amount to $102,000. Because
$102,000 exceeds the current base amount of $97,500, the OASDI
contribution and benefit base is $102,000 for 2008.
Retirement Earnings Test Exempt Amounts
General
We withhold Social Security benefits when a beneficiary under the
normal retirement age (NRA) has earnings in excess of the applicable
retirement earnings test exempt amount. (NRA is the age of initial
benefit entitlement for which the benefit, before rounding, is equal to
the worker's primary insurance amount. The NRA is age 65 for those born
before 1938, and it gradually increases to age 67.) A higher exempt
amount applies in the year in which a person attains his/her NRA, but
only with respect to earnings in months prior to such attainment, and a
lower exempt amount applies at all other ages below NRA. Section
203(f)(8)(B) of the Act, as amended by section 102 of Public Law 104-
121, provides formulas for determining the monthly exempt amounts. The
corresponding annual exempt amounts are exactly 12 times the monthly
amounts.
For beneficiaries attaining NRA in the year, we withhold $1 in
benefits for every $3 of earnings in excess of the annual exempt amount
for months prior to such attainment. For all other beneficiaries under
NRA, we withhold $1 in benefits for every $2 of earnings in excess of
the annual exempt amount.
Computation
Under the formula applicable to beneficiaries who are under NRA and
who will not attain NRA in 2008, the lower monthly exempt amount for
2008 shall be the larger of: (1) The 1994 monthly exempt amount
multiplied by the ratio of the national average wage index for 2006 to
that for 1992; or (2) the 2007 monthly exempt amount ($1,080). If the
resulting amount is not a multiple of $10, it shall be rounded to the
nearest multiple of $10.
Under the formula applicable to beneficiaries attaining NRA in
2008, the higher monthly exempt amount for 2008 shall be the larger of:
(1) the 2002 monthly exempt amount multiplied by the ratio of the
national average wage index for 2006 to that for 2000; or (2) the 2007
monthly exempt amount ($2,870). If the resulting amount is not a
multiple of $10, it shall be rounded to the nearest multiple of $10.
Lower Exempt Amount
Multiplying the 1994 retirement earnings test monthly exempt amount
of $670 by the ratio of the national average wage index for 2006
($38,651.41) to that for 1992 ($22,935.42) produces the amount of
$1,129.10. We round this to $1,130. Because $1,130 is larger than the
corresponding current exempt amount of $1,080, the lower retirement
earnings test monthly exempt amount is $1,130 for 2008. The
corresponding lower annual exempt amount is $13,560 under the
retirement earnings test.
Higher Exempt Amount
Multiplying the 2002 retirement earnings test monthly exempt amount
of $2,500 by the ratio of the national average wage index for 2006
($38,651.41) to that for 2000 ($32,154.82) produces the amount of
$3,005.10. We round this to $3,010. Because $3,010 is larger than the
corresponding current exempt amount of $2,870, the higher retirement
earnings test monthly exempt amount is $3,010 for 2008. The
corresponding higher annual exempt amount is $36,120 under the
retirement earnings test.
Computing Benefits After 1978
General
The Social Security Amendments of 1977 provided a method for
computing benefits which generally applies when a worker first becomes
eligible for benefits after 1978. This method uses the worker's
``average indexed monthly earnings'' to compute the primary insurance
amount. We adjust the computation formula each year to reflect changes
in general wage levels, as measured by the national average wage index.
We also adjust, or ``index,'' a worker's earnings to reflect the
change in general wage levels that occurred during the worker's years
of employment. Such indexation ensures that a worker's future benefit
level will reflect the general rise in the standard of living that will
occur during his or her working lifetime. To compute the average
indexed monthly earnings, we first determine the required number of
years of earnings. Then we select that number of years with the highest
indexed earnings, add the indexed earnings, and divide the total amount
by the total number of months in those years. We then round the
resulting average amount down to the next lower dollar amount. The
result is the average indexed monthly earnings.
For example, to compute the average indexed monthly earnings for a
worker attaining age 62, becoming disabled before age 62, or dying
before attaining age 62, in 2008, we divide the national average wage
index for 2006, $38,651.41, by the national average wage index for each
year prior to 2006 in which the worker had earnings. Then we multiply
the actual wages and self-employment income, as defined in section
211(b) of the Act and credited for each year, by the corresponding
ratio to obtain the worker's indexed earnings for each year before
2006. We consider any earnings in 2006 or later at face value, without
indexing. We then compute the average indexed monthly earnings for
determining the worker's primary insurance amount for 2008.
Computing the Primary Insurance Amount
The primary insurance amount is the sum of three separate
percentages of portions of the average indexed monthly earnings. In
1979 (the first year the formula was in effect), these portions were
the first $180, the amount between $180 and $1,085, and the amount over
$1,085. We call the dollar amounts in the formula governing the
portions of the average indexed monthly earnings the ``bend points'' of
the formula. Thus, the bend points for 1979 were $180 and $1,085.
To obtain the bend points for 2008, we multiply each of the 1979
bend-point amounts by the ratio of the national average wage index for
2006 to that average for 1977. We then round
[[Page 60707]]
these results to the nearest dollar. Multiplying the 1979 amounts of
$180 and $1,085 by the ratio of the national average wage index for
2006 ($38,651.41) to that for 1977 ($9,779.44) produces the amounts of
$711.42 and $4,288.26. We round these to $711 and $4,288. Accordingly,
the portions of the average indexed monthly earnings to be used in 2008
are the first $711, the amount between $711 and $4,288, and the amount
over $4,288.
Consequently, for individuals who first become eligible for old-age
insurance benefits or disability insurance benefits in 2008, or who die
in 2008 before becoming eligible for benefits, their primary insurance
amount will be the sum of
(a) 90 percent of the first $711 of their average indexed monthly
earnings, plus
(b) 32 percent of their average indexed monthly earnings over $711
and through $4,288, plus
(c) 15 percent of their average indexed monthly earnings over
$4,288.
We round this amount to the next lower multiple of $0.10 if it is
not already a multiple of $0.10. This formula and the rounding
adjustment described above are contained in section 215(a) of the Act
(42 U.S.C. 415(a)).
Maximum Benefits Payable to a Family
General
The 1977 amendments continued the long established policy of
limiting the total monthly benefits that a worker's family may receive
based on his or her primary insurance amount. Those amendments also
continued the then existing relationship between maximum family
benefits and primary insurance amounts but did change the method of
computing the maximum amount of benefits that may be paid to a worker's
family. The Social Security Disability Amendments of 1980 (Pub. L. 96-
265) established a formula for computing the maximum benefits payable
to the family of a disabled worker. This formula applies to the family
benefits of workers who first become entitled to disability insurance
benefits after June 30, 1980, and who first become eligible for these
benefits after 1978. For disabled workers initially entitled to
disability benefits before July 1980, or whose disability began before
1979, we compute the family maximum payable the same as the old-age and
survivor family maximum.
Computing the Old-Age and Survivor Family Maximum
The formula used to compute the family maximum is similar to that
used to compute the primary insurance amount. It involves computing the
sum of four separate percentages of portions of the worker's primary
insurance amount. In 1979, these portions were the first $230, the
amount between $230 and $332, the amount between $332 and $433, and the
amount over $433. We refer to such dollar amounts in the formula as the
``bend points'' of the family-maximum formula.
To obtain the bend points for 2008, we multiply each of the 1979
bend-point amounts by the ratio of the national average wage index for
2006 to that average for 1977. Then we round this amount to the nearest
dollar. Multiplying the amounts of $230, $332, and $433 by the ratio of
the national average wage index for 2006 ($38,651.41) to that for 1977
($9,779.44) produces the amounts of $909.03, $1,312.17, and $1,711.35.
We round these amounts to $909, $1,312, and $1,711. Accordingly, the
portions of the primary insurance amounts to be used in 2008 are the
first $909, the amount between $909 and $1,312, the amount between
$1,312 and $1,711, and the amount over $1,711.
Consequently, for the family of a worker who becomes age 62 or dies
in 2008 before age 62, we will compute the total amount of benefits
payable to them so that it does not exceed
(a) 150 percent of the first $909 of the worker's primary insurance
amount, plus
(b) 272 percent of the worker's primary insurance amount over $909
through $1,312, plus
(c) 134 percent of the worker's primary insurance amount over
$1,312 through $1,711, plus
(d) 175 percent of the worker's primary insurance amount over
$1,711.
We then round this amount to the next lower multiple of $0.10 if it
is not already a multiple of $0.10. This formula and the rounding
adjustment described above are contained in section 203(a) of the Act
(42 U.S.C. 403(a)).
Quarter of Coverage Amount
General
The amount of earnings required for a quarter of coverage in 2008
is $1,050. A quarter of coverage is the basic unit for determining
whether a worker is insured under the Social Security program. For
years before 1978, we generally credited an individual with a quarter
of coverage for each quarter in which wages of $50 or more were paid,
or with 4 quarters of coverage for every taxable year in which $400 or
more of self-employment income was earned. Beginning in 1978, employers
generally report wages on an annual basis instead of a quarterly basis.
With the change to annual reporting, section 352(b) of the Social
Security Amendments of 1977 amended section 213(d) of the Act to
provide that a quarter of coverage would be credited for each $250 of
an individual's total wages and self-employment income for calendar
year 1978, up to a maximum of 4 quarters of coverage for the year.
Computation
Under the prescribed formula, the quarter of coverage amount for
2008 shall be the larger of: (1) The 1978 amount of $250 multiplied by
the ratio of the national average wage index for 2006 to that for 1976;
or (2) the current amount of $1,000. Section 213(d) further provides
that if the resulting amount is not a multiple of $10, it shall be
rounded to the nearest multiple of $10.
Quarter of Coverage Amount
Multiplying the 1978 quarter of coverage amount ($250) by the ratio
of the national average wage index for 2006 ($38,651.41) to that for
1976 ($9,226.48) produces the amount of $1,047.30. We then round this
amount to $1,050. Because $1,050 exceeds the current amount of $1,000,
the quarter of coverage amount is $1,050 for 2008.
``Old-Law'' Contribution and Benefit Base
General
The ``old-law'' contribution and benefit base for 2008 is $75,900.
This is the base that would have been effective under the Act without
the enactment of the 1977 amendments.
The ``old-law'' contribution and benefit base is used by:
(a) The Railroad Retirement program to determine certain tax
liabilities and tier II benefits payable under that program to
supplement the tier I payments which correspond to basic Social
Security benefits,
(b) the Pension Benefit Guaranty Corporation to determine the
maximum amount of pension guaranteed under the Employee Retirement
Income Security Act (as stated in section 230(d) of the Social Security
Act),
(c) Social Security to determine a year of coverage in computing
the special minimum benefit, as described earlier, and
(d) Social Security to determine a year of coverage (acquired
whenever earnings equal or exceed 25 percent of the ``old-law'' base
for this purpose only) in computing benefits for persons who are also
eligible to receive pensions based on employment not covered under
section 210 of the Act.
[[Page 60708]]
Computation
The ``old-law'' contribution and benefit base shall be the larger
of: (1) The 1994 ``old-law'' base ($45,000) multiplied by the ratio of
the national average wage index for 2006 to that for 1992; or (2) the
current ``old-law'' base ($72,600). If the resulting amount is not a
multiple of $300, it shall be rounded to the nearest multiple of $300.
Amount
Multiplying the 1994 ``old-law'' contribution and benefit base
amount ($45,000) by the ratio of the national average wage index for
2006 ($38,651.41) to that for 1992 ($22,935.42) produces the amount of
$75,835.26. We round this amount to $75,900. Because $75,900 exceeds
the current amount of $72,600, the ``old-law'' contribution and benefit
base is $75,900 for 2008.
Substantial Gainful Activity Amounts
General
A finding of disability under titles II and XVI of the Act requires
that a person, except for a title XVI disabled child, be unable to
engage in substantial gainful activity (SGA). A person who is earning
more than a certain monthly amount (net of impairment-related work
expenses) is ordinarily considered to be engaging in SGA. The amount of
monthly earnings considered as SGA depends on the nature of a person's
disability. Section 223(d)(4)(A) of the Act specifies a higher SGA
amount for statutorily blind individuals under title II while Federal
regulations (20 CFR 404.1574 and 416.974) specify a lower SGA amount
for non-blind individuals. Both SGA amounts increase in accordance with
increases in the national average wage index.
Computation
The monthly SGA amount for statutorily blind individuals under
title II for 2008 shall be the larger of: (1) Such amount for 1994
multiplied by the ratio of the national average wage index for 2006 to
that for 1992; or (2) such amount for 2007. The monthly SGA amount for
non-blind disabled individuals for 2008 shall be the larger of: (1)
Such amount for 2000 multiplied by the ratio of the national average
wage index for 2006 to that for 1998; or (2) such amount for 2007. In
either case, if the resulting amount is not a multiple of $10, it shall
be rounded to the nearest multiple of $10.
SGA Amount for Statutorily Blind Individuals
Multiplying the 1994 monthly SGA amount for statutorily blind
individuals ($930) by the ratio of the national average wage index for
2006 ($38,651.41) to that for 1992 ($22,935.42) produces the amount of
$1,567.26. We then round this amount to $1,570. Because $1,570 is
larger than the current amount of $1,500, the monthly SGA amount for
statutorily blind individuals is $1,570 for 2008.
SGA Amount for Non-Blind Disabled Individuals
Multiplying the 2000 monthly SGA amount for non-blind individuals
($700) by the ratio of the national average wage index for 2006
($38,651.41) to that for 1998 ($28,861.44) produces the amount of
$937.44. We then round this amount to $940. Because $940 is larger than
the current amount of $900, the monthly SGA amount for non-blind
disabled individuals is $940 for 2008.
Trial Work Period Earnings Threshold
General
During a trial work period, a beneficiary receiving Social Security
disability benefits may test his or her ability to work and still be
considered disabled. We do not consider services performed during the
trial work period as showing that the disability has ended until
services have been performed in at least 9 months (not necessarily
consecutive) in a rolling 60-month period. In 2007, any month in which
earnings exceed $640 is considered a month of services for an
individual's trial work period. In 2008, this monthly amount increases
to $670.
Computation
The method used to determine the new amount is set forth in our
regulations at 20 CFR 404.1592(b). Monthly earnings in 2008, used to
determine whether a month is part of a trial work period, is such
amount for 2001 ($530) multiplied by the ratio of the national average
wage index for 2006 to that for 1999, or, if larger, such amount for
2007. If the amount so calculated is not a multiple of $10, we round it
to the nearest multiple of $10.
Amount
Multiplying the 2001 monthly earnings threshold ($530) by the ratio
of the national average wage index for 2006 ($38,651.41) to that for
1999 ($30,469.84) produces the amount of $672.31. We then round this
amount to $670. Because $670 is larger than the current amount of $640,
the monthly earnings threshold is $670 for 2008.
Domestic Employee Coverage Threshold
General
The minimum amount a domestic worker must earn so that such
earnings are covered under Social Security or Medicare is the domestic
employee coverage threshold. For 2008, this threshold is $1,600.
Section 3121(x) of the Internal Revenue Code provides the formula for
increasing the threshold.
Computation
Under the formula, the domestic employee coverage threshold amount
for 2008 shall be equal to the 1995 amount of $1,000 multiplied by the
ratio of the national average wage index for 2006 to that for 1993. If
the resulting amount is not a multiple of $100, it shall be rounded to
the next lower multiple of $100.
Domestic Employee Coverage Threshold Amount
Multiplying the 1995 domestic employee coverage threshold amount
($1,000) by the ratio of the national average wage index for 2006
($38,651.41) to that for 1993 ($23,132.67) produces the amount of
$1,670.86. We then round this amount to $1,600. Accordingly, the
domestic employee coverage threshold amount is $1,600 for 2008.
Election Worker Coverage Threshold
General
The minimum amount an election worker must earn so that such
earnings are covered under Social Security or Medicare is the election
worker coverage threshold. For 2008, this threshold is $1,400. Section
218(c)(8)(B) of the Act provides the formula for increasing the
threshold.
Computation
Under the formula, the election worker coverage threshold amount
for 2008 shall be equal to the 1999 amount of $1,000 multiplied by the
ratio of the national average wage index for 2006 to that for 1997. If
the amount so determined is not a multiple of $100, it shall be rounded
to the nearest multiple of $100.
Election Worker Coverage Threshold Amount
Multiplying the 1999 election worker coverage threshold amount
($1,000) by the ratio of the national average wage index for 2006
($38,651.41) to that for 1997 ($27,426.00) produces the amount
[[Page 60709]]
of $1,409.30. We then round this amount to $1,400. Accordingly, the
election worker coverage threshold amount is $1,400 for 2008.
(Catalog of Federal Domestic Assistance: Program Nos. 96.001 Social
Security--Disability Insurance; 96.002 Social Security--Retirement
Insurance; 96.004 Social Security--Survivors Insurance; 96.006
Supplemental Security Income).
Dated: October 19, 2007.
Michael J. Astrue,
Commissioner of Social Security.
[FR Doc. E7-21070 Filed 10-24-07; 8:45 am]
BILLING CODE 4191-02-P